Remsen v. . Graves

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 473 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 474 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 475 The defendant cannot be permitted to show, that this bond is invalid, on the ground that it was issued by the corporation for a purpose not authorized by its charter. The guaranty of payment of the bond by the defendant, imports an agreement or undertaking, that the makers of the bond were competent to contract in the manner they have, and that the instrument is a binding obligation upon the makers. (Mason v. Eckford'sEx'rs, 15 N.Y.R., 502; Erwin v. Downs, 15 N.Y.R., 575;McLaughlin v. McGovern, 34 Barb. R., 208; Zabriskie v.Cleveland, Columbia Cincinnati R.R. Co., 23 How. U.S.R., 399;Coggill v. Am. Exchange Bank, 1 Comst. R., 113.) This action was tried before the city judge, without a jury, and we must assume the facts to be as he has found them. As he has found that this second bond was not taken in the place of the first bond, but, on the contrary, was received as a collateral security only, for the same debt, and upon the express agreement that the former bond should remain in force, I do not see, how the appellant can possibly claim he is discharged from his guaranty, by the giving of time to the principal debtors. If this second bond was given merely as collateral security for the first bond, such bond will not be deemed extended, because that which is taken merely as collateral security, has time to run before it falls due. There is another answer to this objection; the judge has found, as a matter of *Page 476 fact, that this second bond was received by the plaintiff, with the knowledge and consent of the defendant. If the defendant consented to an arrangement, the legal effect of which was to extend the time of payment to the principal debtor, he cannot certainly claim that he himself is discharged as surety thereby. The defendant having guaranteed the due payment of the bond, and the bond having a fixed time of payment, a default occurred when the day of payment had passed, and the principal debtors omitted to make payment. There is nothing in the objection, that the bond was, by its terms or condition, payable out of a particular fund. The agreement was, to pay this sum out of the receipts of the association. There is an absolute agreement and undertaking, to pay this sum at the time stated; and they are not relieved from liability, because they have further agreed to pay it out of a particular fund. I am not able to perceive any error committed upon the trial, or in the judgment, and advise the affirmance of the judgment.